Monday, February 07, 2005

Sorry, no luck for KickAAS

Part of Bush’s new budget proposal has a $6 billion decrease in farm subsidies [WSJ], by capping payments to single individuals or corporations at $250,000. Such a proposal would be good for many reasons. You know of my opposition to farm subsidies. They spend a lot of our money, are transfers of wealth to people who vote against the taxes that raise this money, they create unfair competition for third world countries trying to sell their farm products to US and US-competitive markets, and they’re a rationale for other countries keeping their own protectionist policies in place. Many economists say it’s the number one thing we can do to improve the third world’s problems. Heck, you Jeffersonians out there that believe America owes a lot to its backbone of independent farmers, should see how this discourages trends towards corporatization of farms. Also, the WTO has ruled that our subsidies are out of line and need to be cut or else we face retaliatory tariffs. Passing this in the new budget in full would be the best news I could hope for out of Washington this year.

I also don’t think it has a chance of passing or the support of the Administration. Why?

1.He seems unable to check government spending. Even opponents of Republicans must admit there are some benefits to have one party in total control. Creating a checked-government involved tradeoffs, and when you have highly focused authority, at least you get back what you traded off. “At least Mussolini made the trains run on time.” A strong unchecked leader should be able to be efficient at least, and solve tragedy of the commons problems like budgets being full of pork. Despite media perception though, it is unlikely that Bush is really a strong central leader, and he has been unable to reign in government spending at all. His own very ascendant Sec Def has been unable to prevent the Armed Services Committee from continuing to fund outdated and unneeded projects. Farm subsidies are exactly this type of tragedy of the commons problem that the current (and to be fair, past) administration have failed to stand up to.

2.Subsidies still have widespread support in Congress. Especially in the Senate. Democrats are pretty guilty for this, and I have to give props to my man Chuck Hagel (R-Neb), for voting against his interest pretty strongly here. But I do not expect the rest to follow suit, especially when they know the President needs help in so many other matters.

Edit: Note these strong words from Congression Republicans in today's LA Times analysis.

"Those who are currently advocating these draconian cuts would not be in office today if it weren't for rural America," said Rep. John E. Peterson (R-Pa.), co-chairman of the Congressional Rural Caucus.

Bush's farm proposals met a potentially fatal blow by drawing opposition from two key Senate panel chairmen: Thad Cochran (R-Miss.) of the Appropriations Committee and Saxby Chambliss (R-Ga.) of the Agriculture Committee.

3. Bush has never been as free-trade as his rhetoric suggests. The most famous example of this being the steel tariffs he instituted in West Virginia, which were widely believed to be solely directed at WV’s electoral votes. These tariffs infuriated our trading partners, were sanctioned against by the WTO, and hurt Americans (via higher prices for manufacturers that use steel) more than it helped them. And they were only pulled back when they seemed to be affecting the votes of Ohio and Michigan more than WV. That’s just the most public, there have been many other contradictions in the ongoing Doha round of trade talks, especially regarding us not fulfilling promises to third world countries. Now, I completely understand his political needs here, and I don’t believe most Democrats would be any better. I just don’t expect farm subsidies cut by him anymore than a Democratic president, either.

4. This is a "Statue of Liberty" play. President's often do this, which is why their budgets are very bad for judging their priorities. The President needs to say his budget doesn't have a deficit and is doing many good things, like cutting spending (especially since he just spent last year campaigning that he would cut the deficit in half). You put in all your controversial items that matter the most to you, and in order to say your on-budget, you just cut spending hugely for things that won't happen. Leave out maintenance for the Statue of Liberty. Of course the Ways and Means Committee won't let the Statue of Liberty go unfunded, but this disingenuous tactic hides that. Example you may know of, everytime Amtrak get its funding slashed, it says the cut will come out of the Northeast Corridor, the most needed part. So yeah, the reason this is in the budget proposal at all is to hide the costs of other programs, not because there will be political backing for it.


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